EMAIL DETAILS

Sadly, I think this will grant us another excellent trading opportunity.

There Will Be Blood
By PAUL KRUGMAN
Published: November 22, 2010
RECOMMEND
TWITTER
COMMENTS (33)
SIGN IN TO E-MAIL
PRINT
REPRINTS
SHARE

Former Senator Alan Simpson is a Very Serious Person. He must be —
after all, President Obama appointed him as co-chairman of a special
commission on deficit reduction.

Fred R. Conrad/The New York Times
Paul Krugman
Go to Columnist Page »
Blog: The Conscience of a Liberal
Readers' Comments
Readers shared their thoughts on this article.
Read All Comments (33) »
So here’s what the very serious Mr. Simpson said on Friday: “I can’t
wait for the blood bath in April. ... When debt limit time comes,
they’re going to look around and say, ‘What in the hell do we do now?
We’ve got guys who will not approve the debt limit extension unless we
give ’em a piece of meat, real meat,’ ” meaning spending cuts. “And
boy, the blood bath will be extraordinary,” he continued.

Think of Mr. Simpson’s blood lust as one more piece of evidence that
our nation is in much worse shape, much closer to a political
breakdown, than most people realize.

Some explanation: There’s a legal limit to federal debt, which must be
raised periodically if the government keeps running deficits; the
limit will be reached again this spring. And since nobody, not even
the hawkiest of deficit hawks, thinks the budget can be balanced
immediately, the debt limit must be raised to avoid a government
shutdown. But Republicans will probably try to blackmail the president
into policy concessions by, in effect, holding the government hostage;
they’ve done it before.

Now, you might think that the prospect of this kind of standoff, which
might deny many Americans essential services, wreak havoc in financial
markets and undermine America’s role in the world, would worry all men
of good will. But no, Mr. Simpson “can’t wait.” And he’s what passes,
these days, for a reasonable Republican.

The fact is that one of our two great political parties has made it
clear that it has no interest in making America governable, unless
it’s doing the governing. And that party now controls one house of
Congress, which means that the country will not, in fact, be
governable without that party’s cooperation — cooperation that won’t
be forthcoming.

Elite opinion has been slow to recognize this reality. Thus on the
same day that Mr. Simpson rejoiced in the prospect of chaos, Ben
Bernanke, the Federal Reserve chairman, appealed for help in
confronting mass unemployment. He asked for “a fiscal program that
combines near-term measures to enhance growth with strong, confidence-
inducing steps to reduce longer-term structural deficits.”

My immediate thought was, why not ask for a pony, too? After all, the
G.O.P. isn’t interested in helping the economy as long as a Democrat
is in the White House. Indeed, far from being willing to help Mr.
Bernanke’s efforts, Republicans are trying to bully the Fed itself
into giving up completely on trying to reduce unemployment.

And on matters fiscal, the G.O.P. program is to do almost exactly the
opposite of what Mr. Bernanke called for. On one side, Republicans
oppose just about everything that might reduce structural deficits:
they demand that the Bush tax cuts be made permanent while demagoguing
efforts to limit the rise in Medicare costs, which are essential to
any attempts to get the budget under control. On the other, the G.O.P.
opposes anything that might help sustain demand in a depressed economy
— even aid to small businesses, which the party claims to love.

Right now, in particular, Republicans are blocking an extension of
unemployment benefits — an action that will both cause immense
hardship and drain purchasing power from an already sputtering
economy. But there’s no point appealing to the better angels of their
nature; America just doesn’t work that way anymore.

And opposition for the sake of opposition isn’t limited to economic
policy. Politics, they used to tell us, stops at the water’s edge —
but that was then.

These days, national security experts are tearing their hair out over
the decision of Senate Republicans to block a desperately needed new
strategic arms treaty. And everyone knows that these Republicans
oppose the treaty, not because of legitimate objections, but simply
because it’s an Obama administration initiative; if sabotaging the
president endangers the nation, so be it.

How does this end? Mr. Obama is still talking about bipartisan
outreach, and maybe if he caves in sufficiently he can avoid a federal
shutdown this spring. But any respite would be only temporary; again,
the G.O.P. is just not interested in helping a Democrat govern.

My sense is that most Americans still don’t understand this reality.
They still imagine that when push comes to shove, our politicians will
come together to do what’s necessary. But that was another country.

It’s hard to see how this situation is resolved without a major crisis
of some kind. Mr. Simpson may or may not get the blood bath he craves
this April, but there will be blood sooner or later. And we can only
hope that the nation that emerges from that blood bath is still one we
recognize.